CLASS WAR CHESTS
January 26, 2004
This report analyzes campaign contributions and demographic data provided by the U.S. Census Bureau and finds a stark contrast in the amount of large individual campaign contributions that come from zip codes made up largely of whites who live comfortably above the poverty level versus people who live in zip codes with a high poverty rate or a significant non-white population.
The role of large campaign contributions made by powerful special interests is the greatest barrier to people of color and low-income voters being able to participate in the democratic process since the era of literacy tests and poll taxes.
A person’s vote simply does not count as much when the state’s top-contributing zip code encompassing a half-percent of the adult population makes substantially more campaign contributions than five dozen poverty stricken zip codes where 10 percent of the state’s adult population lives.
In the end people of color and the poor pay the price for the breaks wealthy special interests get for big campaign contributions. For instance three reports published in 2003 showed minority contractors and others who do not make large individual campaign contributions receive substantially less state business than contractors who make large contributions.
An investigative report published in December 2003 by The Post-Crescent of Appleton showed minority businesses have lost $371 million in state business because the state has failed to comply with a law requiring it to try to spend 5 percent of state dollars on goods and services sold by minority businesses. Earlier last year, a University of Michigan professor found that Wisconsin builders who made large campaign contributions during the 1990s received state contracts averaging $20 million while those who did not contribute received state contracts averaging $870,000. Finally, the first in the Wisconsin Democracy Campaign’s series of "Graft Tax" reports and updates showed a clear parallel between large state construction contracts and campaign contributions to legislative leaders and two former governors. WDC’s analysis of state prison contracts showed the construction firms that made the most campaign contributions received the most state business.
Among our findings were:
Large individual campaign contributions originating from 904 Wisconsin zip codes to candidates for the legislature, governor, lieutenant governor and attorney general totaled $47.44 million between 1993 and June 30, 2003.
However the sources of these contributions are not evenly dispersed throughout the state. A review of total contributions by zip code shows that much of the money flows from only a fraction of Wisconsin’s zip codes.
WDC found that of the $47.44 million that came from 904 state zip codes;
Six zip codes (Table 1) generated more than $1 million each in contributions for a total of $10.13 million which is 21.3 percent or slightly more than $1 of every $5 worth of all contributions with a Wisconsin zip code address. These zip codes cover 159,064 adults, which is 4 percent of the adult state population, living in portions of Madison and its affluent Shorewood Hills and Maple Bluff suburbs and portions of Milwaukee and its wealthy "Gold Coast" suburbs from the North Shore to Mequon.
Within these zip codes, whose white population ranges from 81 percent to 94 percent, 197 individuals or families contributed $10,000 or more to candidates for the Legislature, governor, lieutenant governor and attorney general from 1993 through June 30, 2003. Forty-five individuals or families contributed $25,000 or more and 12 individuals or families contributed $50,000 or more. These contributors are poster children for some of the most powerful special interests that stake out the halls of the State Capitol, including manufacturers, bankers, lawyers, developers and road builders.
Topping the list were Madison road builder David Kraemer and his wife, Paula, who own Edward Kraemer & Sons Construction and contributed $95,493 to candidates. They were followed by Daniel and Patricia McKeithan of River Hills who contributed $69,596. The McKeithans own Tamarack Petroleum and she is a top Miller Brewing executive. Terrence, Judith and Mia Paul of Madison, owners of Renaissance Learning, a computer software company, made $67,400 in contributions. Fox Point attorney Robert Habush of Habush, Habush and Rottier and his wife, Miriam, were next with contributions totaling $64,797.
The wealthy contributors from the six top-contributing zip codes in the state often used their money to influence the outcomes of elections far from home. For example, in the 2001-02 election cycle they funneled money to dozens of candidates hundreds of miles away who they did not know or could not vote for. Their contributions helped change control of the Senate from Democrats to Republicans and increase the Republican majority in the Assembly.
Keeping in mind that the six zip codes cover portions of Madison and Milwaukee and their surrounding suburbs, some of the candidates who received the greatest amount of money from this elite group include:
The contributions from these zip codes not only comprise a substantial percentage of their total 2001-02 large individual campaign contributions, but in seven cases, the total contributions from the wealthy six zip codes actually exceeded the large individual contributions these candidates received from voters in their district (Table 2).
Much of the money these individuals contributed was funneled through conduits, which are groups that can collect contributions from many individuals, bundle them together and send one large check to the candidate along with the name of each contributor. Conduits are used by corporations, professional associations, political parties and other issue groups. Individual contribution limits apply to the individuals giving through the conduit but there are no limits on the amounts the conduit can deliver to a candidate.
Wealthy contributors in the six-zip-code area contributed $667,675 in large individual contributions in 2001-02 to candidates for the legislature. Of this amount 48 percent, or $323,057, was contributed through a special interest conduit. Nearly half of the conduit contributions - 48 percent or $156,375 - moved through the Majority GOP Conduit, which is run by the Republican Party of Wisconsin to finance GOP candidates, particularly those in targeted races.
People of color are clearly underrepresented in the political money game.
Wisconsin has 26 zip codes in which people of color comprise 25 percent or more of the population and the average poverty rate is 23.8 percent - nearly three times the state average. These zip code areas have a combined adult population of 365,512 who contributed $1.46 million or $3.99 per capita to campaigns from 1993 through June 30, 2003. These zip codes cover portions of Milwaukee, Racine, Madison and some of the state’s Indian reservations. These zip codes hold 9 percent of the state’s adult population but produced only 3 percent of total large individual campaign contributions.
Even the total amount of contributions from all 26 zip codes is dwarfed by the contributions from the zip code with the largest amount of contributions - 53217 - which covers portions of Milwaukee’s wealthiest suburbs, including Bayside, Fox Point, River Hills, Glendale and Whitefish Bay. The population in this zip code is one-sixteenth the size of the 26 zip codes combined, but gave more than twice the amount of campaign contributions. Three other zip codes identified in Table 1 also exceed or match the total contributions mustered by the 26 zip codes with the largest non-white populations.
In 15 of these 26 zip codes people of color make up more than 50 percent of the population and the average poverty rate is 27.8 percent - more than triple the 8.6 percent statewide average. These zip codes have a combined adult population of 228,273, which is 5.7 percent of Wisconsin’s adult population. However, their total large individual campaign contributions - $873,947 from 1993 through June 30, 2003 - represent only 1.8 percent of the $47.44 million in contributions originating from all zip codes.
The city of Milwaukee has 15 zip codes where whites comprise a majority of the population and 14 zip codes where people of color are the majority of the population. A comparison of the campaign contributions made by these two groups is stark:
The current political money game also disenfranchises poor people of all races whether they live in the state’s major metropolitan areas or small rural communities.
More than one-fourth of Wisconsin’s zip codes exceed the state’s 8.6 percent average poverty rate. These include all of the zip codes where people of color make up 25 percent or more of the population, as well as more than 200 others where most of the population is white.
Among this group are 61 zip codes where the poverty rate is the most severe in the state -ranging from 15 percent to 47 percent, according to U.S. Census figures.
Collectively, these zip codes contain 413,633 or 10.4 percent of the state’s adult population. However, their total large individual campaign contributions at $2.27 million make up only 4.8 percent of the total large individual contributions from Wisconsin zip codes.
In contrast, the state’s top-giving zip code, 53217, has only one-nineteenth as many adults as the group of poor zip code areas but gave about $923,000 more than the group and was responsible for 6.7 percent of the total large individual contributions from state zip codes.
Even in cases where a few downtown metropolitan zip codes show a high poverty rate and an unusually large amount of campaign contributions, our analysis shows the contributions did not come from the people who live there, but rather the affluent professionals who work there. For example:
A recent national report titled "The Color of Money" examined federal campaign contributions in the 2000 and 2002 election cycles from every zip code in the country. It found total campaign contributions to federal campaigns from the nation’s top-giving zip code exceeded the combined total contributions from hundreds of zip codes where there was a high poverty rate or where people of color were the majority of the population.
That study’s review of contributions from Wisconsin to federal candidates was similar to WDC’s findings involving campaign contributions to state candidates. Large individual federal contributions of $200 or more from Wisconsin totaled $14.9 million of which 98.3 percent came from zip codes where whites make up most of the population and only 1.7 percent of the contributions came from zip codes where people of color make up most of the population.
Another related study conducted in 2002 by professors from Marquette University and the University of Akron for the CATO Institute, a conservative Washington D.C. think tank, found that most large individual donors are professional, upper-class white males. That contributor profile mirrored findings in the WDC report, "The Color of Money" project and earlier state studies conducted by organizations in Texas, Maryland and North Carolina.